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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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The Week In Review

12/8-12/12

December 12, 2008
The bad news keeps flooding in. Today's weakness is due in part to the Senate voting down the auto bailout last night. The Dow Jones Industrial Average fell 189 points to 8,375. The S&P 500 declined 19 points to 853, while the Nasdaq Composite dropped 19 points to 1,488. Congress is putting pressure on the White House to dip into the TARP money to save the automakers. Having said that, GM is down 14% and Ford is down 6%, but it could've been much worse. Analysts are out downgrading the autos ahead of a possible bankruptcy. More terrible economic news. The producer price index took another drop. The Fed has gone from worrying about inflation to deflation. Retail sales dropped 2% for the week. Retail sales have declined for five straight weeks. KB Toys is set to liquidate themselves. Best Buy had their earnings estimates raised at Keybanc. That's weird. More job cuts from Bank of America, Fairchild Semi, and Las Vegas Sands. Bank of America gives billions in bonuses to the Merrill Lynch brokers to keep them, then turns around and lays off 35,000 workers? The financials are all modestly lower. US Bancorp and Capital One were both downgraded. After the first half an hour the Dow was down just 90 points. The Nasdaq declined just a point as a select number of techs are inching into the green. Through the morning the averages remained range bound with the Dow down 100 points. The Nasdaq is unchanged. GM and Ford are rebounding slowly as it seems the White House will try to help out the automakers. In the afternoon the averages actually moved into the green a couple of times. Resilience. In the last hour, the Dow jumped 80 points, then sold off when Ecuador defaulted on their debt, then rebounded once again. Very resilient market. The Dow Jones Industrial Average finished up 64 points at 8,629, leaving it off nearly 0.1% from last Friday's close. The S&P 500 climbed 6 points to 879, giving it a 0.4% rise on the week. The Nasdaq Composite advanced 32 points, or 2.2%, to 1,540, leaving the technology-laden index up 2.1% from a week ago.


December 11, 2008
A common theme keeps reoccurring every day. The news just keeps getting worse. Today the Labor Department reported jobless claims jumped to a 26-year high in the last week. Great. The Dow Jones Industrial Average fell 144 points to 8,622. GM is down 5% as their bailout bill heads to the Senate where it is expected to receive serious opposition. The S&P 500 Index fell 11 points to 887, while the Nasdaq Composite fell 25 points to 1,540. The financials are lower. US Bancorp is down 5% after announcing a $650 million charge for the quarter. Suntrust is down 3% after having their numbers cut. Goldman Sachs opened lower, but rebounded. The former investment bank is encouraging veteran workers to retire or else. In the retail space, Stanley Works and Costco cut estimates. Both stocks are lower down 2%. Plenty of downgrades and numbers cut within the tech sector including Google, Microsoft, and Oracle. All three opened lower. Ciena is down 15% after missing estimates and reporting a quarterly loss. Baidu lowered their sales outlook. The stock opened lower, but quickly rebounded. In fact, all the major averages rebounded after the open. After the first hour the averages were unchanged. The commodities are performing well once again. Eli Lilly announced a full year loss, but the stock is up 3%. The market is acting resilient. Through the morning the averages hovered around the unchanged level masking weakness in the financials. In the afternoon the weakness was exposed. Entering the last hour the Dow was down 150 points led by the financials. The Nasdaq declined 50 points. So much for the rally. In the last hour more selling. The Dow Jones Industrial Average finished down 196 points, or 2.2%, at 8,565. The S&P 500 Index fell 25 points, or 2.8%, to 873, while the Nasdaq Composite fell 57 points, or 3.7%, to end at 1,507.


December 10, 2008
The bad economic news keeps flowing in, but Wallstreet isn't listening. The Dow Jones Industrial Average rose 82 points to 8,773. GM is higher on hopes of a bailout. The S&P 500 Index is up 7 points to 896 while the Nasdaq Composite inched up 9 points to 1,557. I'm scratching my head looking for a reason why we're up because the news is so bad. A plethora of job cuts, store closings, and downgrades this morning. In the retail space, Office Depot is closing stores cutting jobs. Sony is issuing bonds for the first time in three years to raise cash. Kodak is down 6% after withdrawing guidance. Nike is down 4% after a downgrade and having their numbers cut. The dog of the day goes to Electronic Arts, down 14%, after cutting guidance. Things are so bad, people aren't playing video games. The financials are trying to hold in there, but the news isn't good. American Express is down 6% on two downgrades to sell ratings. Visa, Mastercard, and Paychex were all downgraded at Cowen. All three are down over 2%. GE is modestly higher on a downgraded. Wells Fargo is down 3% even though the CEO said the housing market is bottoming. I think we've heard that before. The commodities are higher although the potash companies are lowering guidance. The techs look pretty good. Google's android phone seems to be gaining support from other telecom companies. Yahoo is up 6% as shareholders want them to sell all or part of the company maybe to Microsoft. After the first hour the Dow was up 120 points. The Nasdaq 24 points. I'm not complaining, but I am still scratching my head. Entering the lunch hour the Dow rose another 20 points to 140 point rally even though Citigroup, Bank of America, American Express, and Walmart are lower. The Nasdaq is up 22 points. The techs look good although Apple is lower. In the afternoon the financials began to sell off. That's not good. Through the afternoon, more and more Dow components moved into the red including GM. At the start of the last hour, the averages were unchanged. This market has been resilient to bad news today. In the last hour, the Governor of California said the state deficit has grown by $3 billion in the last 10 days yet the averages moved higher. Go figure. The Dow Jones Industrial Average finished up 70 points at 8,761. The S&P 500 Index rose 10 points to 899, while the Nasdaq Composite gained 18 points to 1,565.


December 9, 2008
Following a nice rally, the markets are set to open lower on more bad economic and corporate news. The Dow Jones Industrial Average fell 120 points to 8,813. The S&P 500 shed 13 points to 896, while the Nasdaq Composite declined 22 points to 1,549. The dog of the day goes to FedEx which lowered guidance last night. The stock is down 10%. Plenty of companies are lowering guidance including Texas Instruments, Krogers, Nucor, Novellus, and Vail Resorts. Vail is down 4% while Kroger is down 7%. Corning is modestly lower after cutting cap-ex spending. Sony is laying off 8,000 jobs, however, the stock is higher. The commodities look good this morning. The financials are lower, but not by much. One thing I do know is don't mess with Bank of America. Yesterday the Illinois Governor threatened to prevent the bank from conducting business in his state. Today he was taken into Federal custody. Ouch. After the first half an hour the Nasdaq moved into the green led by the techs. Texas Instruments is up 4% even though they lowered guidance. The Dow remains down 100 points. Disney is lower even though they received an upgrade. GE is down 3% after receiving a nasty downgrade from JP Morgan. After the first hour the averages kept recovering. The Nasdaq rose 20 points. The Dow inched closer to the unchanged level. The financials are now in the green. The markets have become resilient to bad news, for now. Entering the lunch hour the averages sold back off. The fear is back. A four week auction for Treasury bills yielded 0.00 or zero point zero, zero. Four weeks zero interest. Fiction takes a backseat to reality. Entering the last hour the Dow was down over 200 points. It looks like we're destine for a down day. The Dow Jones Industrial Average finished down 242 points at 8,691. The S&P 500 shed 21 points to 888 while the Nasdaq Composite declined 24 points to 1,547.




December 8, 2008
U.S. stocks on Monday started higher, extending the prior session's rally, thanks to overseas strength and more talks of economic stimulus. The Dow Jones Industrial Average gained 169 points to 8,804. 3M is one of the few Dow components trading lower after lowering guidance. The S&P 500 climbed 19 points to 895 while the Nasdaq Composite rose 31 points to 1,540. The insurance stocks had a nice jolt on Friday when Hartford raised guidance. Hartford continues its rally, up 20% today, on positive analyst comments. Metlife is up 4% after indicating they will beat estimates. Allstate is up 4% on positive comments. The commodities are performing well. Oil is higher on news Saudi Arabia will cut production. Dow Chemical is up 7% after announcing a restructuring. Chesapeake Energy is up 25% after scrapping plans to raise more equity. Instead, the natural gas firm will cut spending and sell assets. The financials are performing well even as the NY Post indicated Citigroup and Bank of America may need more capital next year. Many of these financials like GE, American Express, JP Morgan, and Wells Fargo are pushing one month highs. After the first hour, the Dow was up 260 points. The Nasdaq rose 45 points. Pretty much everything looks good. Beaten up techs like Intel, Google, Apple, and Research in Motion are all higher. Google is back above the 300 level. Through the morning and into the afternoon, the Dow remained above 200 points even as 3M moves lower. GM and Ford are higher on anticipation of some money from Congress to get through the year-end. The averages briefly sold off after the Tribune filed for bankruptcy. Sam Zell bought the company for $8.2 billion a year ago, took them private, only to file for Chapter 11. Amazing. Shareholders got the better deal there. Entering the last hour the averages pushed to new highs with the Dow up over 300 points. The Nasdaq rose 60 points. In the last hour the Dow rose nearly 400 points above 9000 before pulling back. The Nasdaq rose 75 points before pulling back. The Dow Jones Industrial Average finished up 298 points, or 3.5%, to 8,934, its highest close since Nov. 7. The S&P 500 rose 33 points, or 3.8%, to 909, while the Nasdaq Composite gained 62 points, or 4.1%, to end at 1,571.